Tracker & SVR
What is an SVR, and why does it cost so much more?
Every mortgage lender in the UK has a standard variable rate, and every one of them sets it differently. It isn't pegged to the Bank of England base rate by any formula, which is why two lenders can share the same base rate and still charge SVRs that sit two percentage points apart. Almost nobody should stay on it longer than they have to — but there is one situation where a few weeks on the SVR is the cheaper option.
How lenders actually set it
The base rate is the Bank of England's rate, reviewed roughly every six weeks. The SVR is the lender's own rate, and the lender can move it whenever it likes, by whatever amount it likes. In practice most lenders change their SVR shortly after the Bank of England moves the base rate, but the size of the move and the margin above base rate are entirely up to them. That margin covers the lender's funding costs, profit, and — because SVR is the rate borrowers land on by default rather than by choosing it — it's priced with far less competitive pressure than a fixed or tracker deal.
What the gap looks like right now
As of August 2026 the Bank of England base rate is 3.75%. Against that single number, lender SVRs range from First Direct at 6.24% up to Aldermore at 8.38%, with big-name lenders like Nationwide (6.49%), NatWest (6.74%) and Halifax (7.24%) spread across the gap between them. The average SVR across the market sits at 7.13%, roughly 3.4 percentage points above the base rate it supposedly tracks. If SVR were a formula, that spread wouldn't exist. It exists because it's a decision, remade by each lender on its own schedule.
Why it's almost always worth leaving fast
A new two-year fix currently averages 5.63%, and a five-year fix 5.66% — both up from lows of around 4.9% in February 2026 after lenders reversed course on rate cuts in July, following swap-rate volatility tied to Middle East unrest pushing up energy prices and inflation expectations. Even with that rise, a typical fix is still roughly 1.5 percentage points cheaper than the average SVR. On a £180,000 balance with 20 years left, moving from a 7.13% SVR to a 5.63% two-year fix cuts the monthly payment from roughly £1,415 to about £1,240, a saving of around £175 a month, or £2,100 over a year. That gap is why a product transfer or remortgage almost always beats staying put, even accounting for a fee.
The one case where staying briefly makes sense
If you're selling the property within a few months, taking a new fixed deal can cost more than it saves. Most fixes carry a product fee, often £999, plus in some cases an early repayment charge if you complete the sale before the new deal's minimum term. Paying that fee to save £175 a month for six or eight weeks before completion rarely clears the fee, let alone any charge on top. In that specific case, riding out the SVR — which usually has no exit fee and no notice period — costs less overall than switching. Outside of an imminent sale, this logic doesn't hold: the SVR premium compounds every month you stay, and for anyone keeping the property, a new deal pays for itself quickly. If you're not selling but are struggling to switch despite a clean payment record, that's usually a different problem — see what happens when your fixed rate ends for the routes off the SVR that don't require a full remortgage.
What to actually do
Check your own lender's current SVR against what a new fix or tracker would cost you today — the gap is rarely small enough to ignore, and it starts costing you from the first day you land on it, not after some grace period. If you're coming off a tracker rather than a fix, the same default applies; what happens when a tracker ends covers that path in more detail. The SVR cost calculator puts an exact number on what staying is costing you each month against a deal you could take instead, and our guide to the dates that cost you money covers the lock windows that let you arrange a new deal before you ever touch the SVR.
Frequently asked questions
Is the SVR tied to the Bank of England base rate?
Not by any fixed formula. Lenders usually move their SVR shortly after the base rate changes, but the size of the move and the margin above base rate are set by each lender individually. That's why SVRs vary by more than two percentage points across lenders sharing the same base rate.
Why is the SVR so much higher than a fixed or tracker rate?
SVR is the rate you land on by default, not the rate you shop for, so lenders price it with far less competitive pressure. As of August 2026 the average SVR is 7.13%, against average two-year fixes around 5.63%.
Is it ever worth staying on the SVR deliberately?
Mainly if you're selling the property within a few months. A new fixed deal's product fee, often around £999, can cost more than the SVR premium saves over a short remaining period. Outside of an imminent sale, switching off the SVR almost always pays for itself quickly.
See your dates, free
The free timeline shows when your deal ends, what the SVR would cost you if you did nothing, and when your lock window opens, all from your own figures. For a single payment per deal we then watch it and email you on the days that matter.
Examples are illustrative and rounded. Your own mortgage offer and lender confirm your actual figures and dates. This is information, not financial advice. For advice on your circumstances, speak to a mortgage adviser regulated by the FCA.